Indian Digital Economy Revolution


India aims to become a $1 trillion digital economy by 2025 and digital infrastructure will play a key role in this journey. The first step was Pradhan Mantri Jan Dhhan Yojna. Launched in 2014, PMJDY has opened over 318 million bank accounts and issued 290 million RuPay cards by June 2018. Linking of Aadhar (UIDAI) to bank accounts makes the system less vulnerable. JanDhan- Aadhaar-Mobile or "JAM Trinity" to be precise is helping India to go digital. Almosr 870 million bank accounts were linked to Aadhaar by Feb 2018, compared to 399 million by April 2017 and mere 56 million by Jan 2014. To give a new dimension to Indian digital Economy "Unified Payment Interface" (UPI) was launched by NPCI on April 2016. This has given an extra push when PM Modi declared Demonetization in Nov 8, 2016. By 2020, India's number of registered Mobile Money account jumped 95 times since 2014, as per IMF report.

The UPI transaction and values (taking 1 USD = ₹70)



In Nov 2020, Unified Payments Interface (UPI) transactions compared to October 2020 grew 6.7% sequentially to 220 crore. The value of UPI-based payments during the month was at ₹3.90 lakh crore (~USD 53.42 billion), compared to ₹3.86 lakh crore (~USD 52.88 billion) in October. 200 banks have gone live on UPI from 189 banks a month ago. 

Not only UPI, but IMPS also helped in Digital Transaction. In FY20, more than ₹23.37 lakh crore is transacted through IMPS.

Indian FinTech was one of top five markets by value of capital funding and investments in the sector with nearly $270 million of funding in 2016. The fintech and their digital payment schemes like Digital Wallet, UPI, Scan and Pay has revolutionized Indian Digital Economy. India is 4th largest fintech market with close 2100 startups only behind USA (~10000), UK (~5000) and China (~2500). Among them, 405 are based on payments, 365 in lending, 313 in wealth tech, 173 in personal finace management. India's fintech adoption rate on 2019 as per EY report is 87%, compared to 52% in 2017. This is still impressive compared to Global Fintech adoption rate is just 64%. Some of the leading Fintech apps in India are-
  1. PayTM
  2. Google Pay (Based in USA)
  3. Airtel Money
  4. MobiKwik
  5. PhonePe
  6. RazorPay
  7. Pine Labs
  8. BHIM (developed by NPCI)
  9. PolicyBazaar
  10. PayU
  11. LendingKart
  12. Whatsapp Pay (Based in USA)
  13. MSwipe
  14. BillDesk
  15. CRED
USA based "ACI Worldwide" published "Prime Time for Real time" for real time transaction in 2020:
  1. India - 25478 million (36.3%)
  2. China - 15741 million
  3. South Korea - 6015 million
  4. Thailand - 5241 million
  5. UK - 2827 million
  6. Nigeria - 1911 million
  7. Japan - 1676 million
  8. Brazil - 1330 million
  9. USA - 1219 million
  10. Mexico - 942 million
The transaction volume share in India stood 15.6% and 22.9% for instant payments and other electronic payments. Real-time surge increase 41% in 2020 as COVID-19 pandemic hit the World. More than 70.3 billion real time transaction performed in 2020.

34 companies from Asia have been named among 2019 Top 100 Global Fintech Innovators, a report published by KPMG and H2 Venture. The rollout of 5G will require a lot of Indian companies to experiment with new technologies. All investments made by companies in internet of things (IoT), machine-to-machine (M2M) and artificial intelligence (AI) for the next two years should be seen as R&D, and extended the related incentives. This will help kick-start IoT, M2M and AI in businesses in a big way.

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